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Oil vs propane – Need help with calculation

WEG | Posted in Mechanicals on

Oil $138,690 btu/gal, $3.02 gal, Furnace 75″ efficient
Propane 91,333 btu/gal, $2.75 gal, Furnace 95% efficient
Then
Cost per “delivered” btu is
Oil: (138,690 x.75)/$3.024 = 34,397 btu’s delivered per dollar
Propane: (91,333x.95)/$2.75 = 31,154 btu’s delivered per dollar

So how many gallons of propane equals 1 gallon of oil after allowing for system efficiency?
Calc 1:
31,154X=34,397
X=1.1
so you need 1.1 gallons of propane to equal 1 gallon oil, so
$2.75×1.1=3.03
Which is about equal to the current cost of a gallon of oil

or is Calc #2 the right one to use?

Calc 2:
X(91,333x.95)= (138,690 x.75)
X=1.2
so you need 1.2 gallons of propane to equal 1 gallon oil

Therefore “Delivered btu equilibrium price” is as follows:
$2.74×1.2=$3.29
So if oil is less than $3.29 gallon it is a lower cost options to burn oil at the propane price of $2.75.

Is this right?

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Replies

  1. Riversong | | #1

    Calc #2 is correct.

    In calc #1, you've determined that the oil is 10% more cost effective per delivered BTU.

    In calc #2, you've determined the price spread required for the same delivered BTUs.

    However, this is at what I assume are today's prices. Pay attention to the price volatility of the two fuels over time. With the catastrophe in the Gulf due to offshore oil drilling, and likely limits on future drilling, fuel oil prices may rise faster than propane. And propane burns much more cleanly than fuel oil, reducing particulates, smog and global warming potential. Oil burners have to be tuned up every year. Propane burners do not.

  2. Jesse Thompson | | #2

    Buildinggreen.com has built a very nice calculator to help you with these comparisons:

    http://www.buildinggreen.com/calc/fuel_cost.cfm

    Jesse Thompson
    Kaplan Thompson Architects

  3. WEG | | #3

    Thanks, i went to buildinggreen.com fuel cost calculator.It works out that oil would have to increase in price to $3.62 compared to Propane at $2.75 to make it beneficial to to switch to Propane. And if oil increases in price, propane will follow the same path, so we'll never get a great divergence in price differential.

    So if I stick to using less oil instead of converting to propane and adding that gas log, garage heater and emergency generator I'll save the water table in the shale oil fields from Virginia to upstate new york. Switching to propane seems to make NO SENSE. If gas exploration ruins, or has the potential to ruin, drinking water why is it considered green energy?

    If I'm missing something please let me know.

  4. Riversong | | #4

    Propane and natural gas are by no stretch "green" energy. They burn much cleaner than oil and don't create ground or ocean spills. But, as you point out, some of the newer extraction techniques, like fracking, can have serious environmental impacts on groundwater.

    The extraction and consumption of fossil fuels of any kind - coal, oil or gas - are not "green" or sustainable. It is the equivalent of spending one's capital (ancient sunlight) rather than income (solar energy).

    All of life runs on pure solar energy, or such energy converted into plants and animals. The only "green" energy are these low-exergy solar sources, including wind and wave. Even geothermal, unless it's available in hot springs, would be difficult to call "green" since it requires drilling the earth.

  5. Jesse Thompson | | #5

    There are other issues as well with the oil vs. propane debate, especially related to fuel storage.

    Oil requires you to store hundreds of gallons of toxic fuel inside your living space, iin a tank you have to purchase and maintain, with miserable and dangerous consequences to any leakage, whether liquid or vapor. Oil also (in almost all situations) cannot be direct vented and requires a chimney, which is a large construction cost that should be factored in to lifecycle costs.

    Propane tanks are either free (owned by the company), ugly and aboveground and need careful siting or expensive, owned by you and buried.

    We haven't designed a new house with an oil boiler in many years now, even in New England, the home of fuel oil heating.

  6. Mike | | #6

    love the buildinggreen calculator. Sure wish it offered hot water systems in the drop down list!

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